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Summary:

SBC COO Randall Stephenson might think that $4 billion is nothing, but when he says, “This seems to come up every so often. We always look at this, we are kind of old-fashioned network telephone types. The reality is that there is a lot of cost […]

SBC COO Randall Stephenson might think that $4 billion is nothing, but when he says, “This seems to come up every so often. We always look at this, we are kind of old-fashioned network telephone types. The reality is that there is a lot of cost behind providing these services ….As long as there is a cost attached to it [the connection into the home], free is just illogical to me,” the man makes a lot of sense. Stephenson’s swipe was at Rupert Murdoch, who told the same Goldman Sachs Conference attendees that voice will be free within three years. Murdoch’s new found love for Internet & VoIP will soon wane, much like his “fascination of China.” Y’all remember the first time he fell in love with online, bought Delphi and ran it into ground. via IP Democracy

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  1. Stephenson is old fashioned. To him a network is something designed as the transport layer for a specific service. His network was built for voice services and thus the cost of the network itself is the cost of providing voice. In the modern packet-oriented world, the network is designed to transport generic packets not a specific service. Web browsing, e-mail, video, voice P2P file transfer, these things all happen on the same network. Why insist that voice is somehow different from e-mail in terms of the connection you’ve provided to the user? Charge for the pipe you’ve provided, not what the user does with it. If you also want to provide the service, you can charge for that too, but keep in mind that some services just don’t command a premium. At this point, you just can’t charge very much for voice. Stephenson’s only hope is that the puplic will go along with him blocking other service providers from accessing his users — in effect replacing internet access with a walled garden. Thus far, people haven’t been too receptive to such tactics.

  2. Even though SBC is probably the smartest RBOC, Murdoch is going to win this battle.

    Here’s the bottom line, other players, google included, can afford to offer Voice as a loss leader to their other business’. Just ask Meg at eBay.

    Once this trend gains traction, the phone company’s are totally screwed because they are danagerously over-capitalized, and they’ve got nothing else to sell.

    When Google emerges from next year’s auctions with some nice chunks of spectrum, watch out.

    I predict a bigtime BK filing by eoy 2008.

  3. I’m also thinking it might be worth our while to distinguish between *free* and *un-metered* voice.

    Un-metered voice is already a reality today with the likes of vonage, lingo.com, but we’re still paying for the service separately, because we’re still dependent on the almighty “telephone number”.

    There’ll always be a cost associated with providing voice services, but that cost, overtime, will likely get closer to the nominal monthly fee you’re paying for broadband connectivity.

    Today, for $20/month, lingo.com lets me call anywhere in the U.S., Canada, Puerto Rico, and Western Europe, for as long as I want.

    Monthly broadband prices have gone down in the U.S. from about $50/month to $40/month (i’m talking about real broadband, not the 384Kbps *crap SBC/Yahoo* baits you in with). It’s not unthinkable to see ISPs bundle unlimited voice service with broadband connectivity for a total of say, $60/month, and that’s giving you seamless interoperability with the PSTN.

    Now, consider ISPs who allow, with your opting-in, your e-mail address to also be your SIP address for other sip-enabled users to just “call you up”, you’re essentially removing the PSTN out of the equation. What’s *that* going to do to the price of Voice?

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